Treasury readying aid for small business loans

WASHINGTON (Reuters) – The U.S. Treasury will soon launch a new program aimed at aiding small business lending, the head of the Treasury’s $700 billion bailout fund said on Thursday.

Herbert Allison, the Treasury’s assistant secretary for financial stability, declined to provide details or specific timing on the program in testimony before the U.S. Senate Banking Committee.

Allison also said that U.S. Treasury Secretary Timothy Geithner would consider recent progress made improving financial stability, as well as areas of the financial system that are not working well, such as securitization, in deciding whether to extend the TARP program beyond year-end.

Under the law that created TARP passed nearly a year ago, new investments under the would be prohibited after December 31, 2009 unless Geithner decides to extend this through October 2010.